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JP Morgan on Thursday forecast Brent oil prices to decline to $73 per barrel in 2025, as it sees a shift in the global oil market from a balance in 2024 to a large 1.2 million barrels per day (bpd) surplus in the coming year.
“Assuming that OPEC alliance stays put at current production levels through 2025, we expect Brent prices to dip below $70 by year-end, with WTI exiting the year at $64,” the bank said in a research note.
OPEC+, which pumps about half the world’s oil, at its Dec. 5 meeting pushed back the start of oil output rises by three months until April 2025 and extended the full unwinding of cuts by a year until the end of 2026 due to weak demand and booming production outside the group.
OPEC+ members are currently cutting output by a total of 5.85 million bpd, or about 5.7% of global demand, in a series of steps agreed since 2022 to support the market.
The bank expects global oil demand growth to decelerate from 1.3 million bpd this year to 1.1 million bpd next year, before rebounding to 1.3 million bpd in 2026, consistent with long-term historical averages.
JP Morgan said the central theme of their outlook is that “any policies from the incoming Trump administration that could potentially raise oil prices—such as exerting pressure on Iran, Venezuela, and possibly Russia to limit their oil exports and revenues—are likely to be secondary to Trump’s primary objective of keeping energy prices low.”
Brent crude futures were trading near $73.00 per barrel on Thursday, while U.S. West Texas Intermediate crude futures were at $70.00 per barrel.
Reporting by Anushree Mukherjee in Bengaluru, additional reporting by Swati Verma
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